rendering a rigged 2D character
While you are working with 2D, don't forget that the Z axis still exists! If you're doing 2D you should be using an orthographic camera, so further elements won't appear farther. The Z axis essentially becomes the sorting order:





The reason your arm is cutting through the head is because you have the transparency set to Mask instead of Z Transparency. Just go through and make sure everything is on Z Transparency, and you should be good.